Macy’s

Macy’s CFO said the company’s margins increased thanks to a 10% increase in the full price Average Unit Retail for Macy’s brand. “Adrian Mitchell — Chief Financial Officer: Merchandise margin increased 160 basis points from the fourth quarter of 2019. Leaner, more productive inventories and lower markdowns were the primary drivers. Our pricing initiatives also helped drive higher full-price sell-throughs and AURs. Versus 2019, full-price sell-throughs improved 660 basis points and full-price AURs increased 10% for the Macy’s brand.” (Macy’s Q4 2021 Earnings Call, 2/22/2022) 

Macy’s CFO: “we are committed to continuing the discipline we demonstrated in 2021 to drive strong margin performance through our pricing initiatives for merchandise margin.” “Adrian Mitchell — Chief Financial Officer: We believe 2022 will be a transitional year as we move beyond the recovery and the market begins to normalize. At the same time, we expect high levels of inflation to erode consumer discretionary income. Our 2022 expectations reflect our strategic positioning and the associated risks in what may be a more challenging market. Despite these challenges, we are committed to continuing the discipline we demonstrated in 2021 to drive strong margin performance through our pricing initiatives for merchandise margin, our continued focus on delivery expense mitigation and our SG&A cost discipline.” (Macy’s Q4 2021 Earnings Call, 2/22/2022) 

Macy’s CEO said the company “sought the most” price increases for “big ticket” items because “for the larger big-ticket items, we could pass on, we basically — those cost increases led to higher retail prices and higher tickets. Customers accepted those.” “Jeff Gennette — Chairman and Chief Executive Officer: Yes. Oliver, it’s a great question. And it’s a different story, depending on what category you’re in and what brands you’re in, and what the actual item is, whether or not it is a key item, an opening price, whether or not it is fashion. So all of them have different rules. What I’d say is that where we have done this, we sought the most in big ticket because big ticket, based on the supply chain challenges and just production, we were dealing with price increases really in the very beginning of ’21 all the way through. And what we found is that you get into like some of the sectionals and some of the price points for the larger big-ticket items, we could pass on, we basically — those cost increases led to higher retail prices and higher tickets. Customers accepted those.” (Macy’s  Q4 2021 Earnings Call, 2/22/2022) 

Macy’s CEO said average unit retail prices were up 11% 2021 and “we expect it to be more in the 5% range across all of our categories in ’22.” “Jeff Gennette — Chairman and Chief Executive Officer: So we just have much more science and data analytics that are helping us in all of our pricing decisions that are mitigating some of the effects of where we are having higher tickets. To the question that Adrian answered earlier from Paul, we do expect more modest AUR increases in 2022. We were up a little over 11% in ’21. We expect it to be more in the 5% range across all of our categories in ’22.” (Macy’s Q4 2021 Earnings Call, 2/22/2022)